You could spray Scotch-Gard on it.

http://us.kiwicare.com/products/kiwi-camp-dry-heavy-duty-water-repellent Try Camp Dry. It’s good for waterproofing anything from tents (fabric) to boots (leather) to maps (paper).

In general, considering “expensive items that don’t work” – it’s an economic problem (again, in a very broad and general sense; I’m not talking here about “how to fix an umbrella that’s not working”) of a Sunk Cost Fallacy.

That is, how expensive the item was at one time is of no import at all “right now”. It’s a sunk cost. You can’t get the money back (except possibly by selling the item to someone for whom it will work “well enough” – though it would be an act of bad faith to sell it as “a working umbrella” when it clearly fails at that purpose; maybe it works well as a sun shade, for example, and a buyer could be found on that basis), but you can also “repurpose” the thing in other ways. For example, as mentioned above, or as some kind of art piece. (Which, if done correctly and with enough flair, could make its value increase inestimably – and it wouldn’t ever have to even get wet again.)

Personally, I would opt to buy a new umbrella that actually works, doesn’t cost too much to begin with (so that I don’t have to worry about future care and repairs), and won’t occupy my time and attention on considerations, since it’s just a tool, after all – or consideration of its expense.

Unless, of course, it’s a piece of art, which deserves to be treated differently from a rain protection device that gets tossed in the back seat of the car until it’s needed…

Good ideas thanks all.
If Scothch Guard works that would be great but they need to market that part. Do they?